Past dominations, economic and social regional differences

Does history affect current levels of economic development and individuals’ behavior? This study demonstrates that it does. In particular, we focus on the connection between economic performance and the quality of government institutions in Italian NUTS3 regions, from one side, and on the relation between shirking behavior of teachers in Italian public schools and the level of social capital across different regional environments, on the other side. In order to address likely endogeneity problems, we use the histories of the different foreign dominations that ruled Italian regions over seven hundred years before the creation of the unified Italian State: in fact, the political fragmented history of Italy provides a rich source of variation at a regional level. Our results suggest that past historical institutions play a significant role on the current public administration quality and that the quality of institutions matter for development. Also, we show that the current social capital level has a strong effect on the absenteeism rate of teachers in Italian schools. Overall, we demonstrate, once again, that history can be used to find suitable instruments.